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Fitch IBCA Assigns Ratings to Chrysler Financial Co. L.L.C.

26 October 1998

Fitch IBCA Assigns Ratings to Chrysler Financial Co. L.L.C. - Fitch IBCA -

    NEW YORK, Oct. 26 -- Fitch IBCA assigns its 'A' senior debt
rating and 'F1' commercial paper rating to Chrysler Financial Co. L.L.C.
(Chrysler Financial L.L.C.), and simultaneously withdraws its 'A' senior debt
and 'F1' commercial paper ratings for Chrysler Financial Corp.  Chrysler
Corp., which had owned all the capital stock of Chrysler Financial Corp., is
now the sole member (owner) of Chrysler Financial L.L.C.  The ratings for
Chrysler Corp. and Chrysler Financial L.L.C. remain on RatingAlert Positive,
pending completion of the merger with Daimler-Benz in November 1998.
    On Oct. 25, 1998, Chrysler Financial Corp. converted from a corporation to
a limited liability company (L.L.C.).  The new L.L.C. will be the surviving
legal entity of a merger between Chrysler Financial L.L.C., a newly created
Michigan limited liability company, and Chrysler Financial Corp.  All rated
debt issues of the former Chrysler Financial Corp. will now be assumed by
Chrysler Financial L.L.C.
    Chrysler Financial L.L.C.'s ratings reflect its ownership by a financially
strong parent, improving fundamentals, strong liquidity, adequate capital, and
access to the capital markets.  Concerns center on the increased margin
pressure resulting from intense competition in the auto finance industry,
slightly weaker asset quality compared to the early 1990s, increased
depreciation expense on the leasing portfolio, and business risk at the
parent.
    In line with the performance of other consumer assets and more stringent
underwriting guidelines, the credit quality at Chrysler Financial L.L.C. has
shown some stabilization in the past year.  Growth in the managed portfolio
has centered on retail loans and leases, while wholesale loans have remained
fairly stable.  Although asset quality has stabilized, competition within the
auto lending sector has constrained lending margins, and reduced profitability
in the leased portfolio.
    Compared to the other major auto captives, Chrysler Financial L.L.C.
continues to fund a substantial portion of its managed portfolio through
securitizations.  While this market will continue to be a primary funding
vehicle for the company, an improved financial position and higher ratings has
allowed the company to expand its borrowings in the capital markets at
attractive rates.  The company maintains strong liquidity from its receivables
portfolio, supplemented by a solid backup facility provided by a diverse group
of banks.  The merger with Daimler-Benz should provide the consolidated
corporation with added flexibility and international diversity.